In this episode of Lehigh University’s College of Business ilLUminate podcast, Nevena Koukova and Rebecca Wang discuss a recent study they published that looked at whether online retailers who ask customers for only positive reviews wind up undermining customer loyalty.
Koukova is an associate professor of marketing whose research interests include pricing, digital products, and consumer decision-making. Wang is also an associate professor of marketing whose interests are at the intersection of marketing, data science, and technologies.
They spoke with Jack Croft, host of the ilLUminate podcast. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.
Below is an edited excerpt from that conversation. Read the complete podcast transcript.
Jack Croft: I think by now, almost everyone who has made an online purchase of some kind has received a follow-up email or text asking them to review and rate the product they purchased. So let's start by talking about the importance of those online reviews and ratings, both for consumers and for retailers.
Rebecca Wang: I think online reviews have become a necessity for both consumers and retailers. Some industry surveys actually suggest that more than 80% of consumers read reviews and conduct searches online when they want to purchase an item. Just think, the holiday season is approaching, so what do you want to [buy]—say, a usable Christmas tree, what do you do? You go to a website like Amazon.com and you read the reviews because reviews help you make purchase decisions.
In theory, they provide very essential, truthful information that can accurately portray what the past users, your peer consumers, how they experience the product, right? So as a potential customer, you can make these inferences. You can infer whether the product is going to fit with your needs and also the product's quality ...
It's actually kind of hard for a retailer to obtain authentic and organic reviews. In fact, we analyzed a secondary data set, and we found out that [of] more than 50,000 online reviews, 98% of them were written due to a solicitation email, meaning that the retailer, after the customer has purchased the product, sends an email to that customer asking them to leave a review. 98% of the reviews actually resulted from that solicitation. And if we remove all these solicited reviews from the data set, 88% of the products would not have any reviews at all. So, naturally, soliciting reviews is something that a retailer would do in order to build their online review presence.
Croft: Your study focuses specifically on how consumers feel about requests from retailers to provide what are known as conditional reviews, as opposed to asking consumers for unconditional reviews. Let's start there with definitions of the differences between those kinds of reviews and why those are important.
Nevena Koukova: In our study and in general, consumers who receive an unconditional request are asked to simply write a review following a purchase. So, for example, "Please leave a review that will be posted on our website." In contrast, a conditional request is one in which customers are invited to write a review, but only if the review will be favorable. For example, "If you loved our product, please leave a five-star review."
Croft: Without getting too deep into the nitty-gritty of the details here, how did the two of you go about setting up the experiments you conducted to measure consumer responses to both unconditional and conditional review requests?
Koukova: We did a number of online experiments to test our hypotheses and provide insights in terms of how consumers respond to conditional or unconditional requests. We recruited online participants through MTurk [Amazon Mechanical Turk Cloud Research] and Prolific [prolific.co], so both of these are crowdsourcing marketplaces. … We created a number of online experiments, trying to show consumers real purchase situations and ask them to respond to questions.
Croft: And kind of the $64,000 question, what impact did those who asked for conditional reviews—the ones who said, "Please leave only a five-star review,"—what kind of impact did that have on the way consumers felt about the retailers?
Koukova: In our paper, we report the results of six experiments with more than 3,000 participants, and we provide very consistent and convergent evidence that customers who receive conditional requests are less loyal to the retailer in the future. And the reason is that they perceive the retailer as more manipulative and untrustworthy. What was very interesting for us is that the negative results are very persistent, even in the case of a very positive experience.
In some of the studies, we used mixed experiments; in some of the studies, both mixed and positive experiences. And what is worrisome is that, even after [a] positive experience with the product or the company, when consumers receive a conditional review request, they're less likely to buy again from the retailer, continue working with the same retailer again because they perceived the company as more manipulative and untrustworthy. And we also identify in our research easily implementable strategies to try to diminish the negative effect of the specific message.
Croft: One of the interesting findings in the study was that making just small changes to the message content could lessen, although not eliminate, the negative impact of a conditional review request. Could you give us a few examples of how that works?
Koukova: We outline two specific message strategies that companies can use to diminish the negative effect of conditional review requests. The logic behind one of our strategies is that consumers may feel that the company tries to shut them down with the request only to leave a review if it will be positive. So by providing another avenue for these consumers to communicate to the company about their negative experience or their displeasure, this will diminish the negative effect of a conditional review request. We call this placation, and specifically in our studies, we tell companies [to] tell consumers if they have any issues, problems, or negative experience, please email us and we will respond directly to your concern.
The second strategy that we outline and we test in our studies is the conditional request with underdog justification. Again, this is something that has been shown in previous research to help companies in a number of conditions. For example, underdog justification will be communicating to consumers that we're a small, independent company. We rely completely on positive customer reviews to stay in business. Please leave us a positive review. With both these strategies, we show that if we slightly modify the message, either with placation or with underdog justification, companies can avoid the negative effect of conditional review requests.
Croft: Clearly, the retailers don't want to be seen as self-serving, manipulative, and untrustworthy in asking for these conditional reviews. So what are the key takeaways that you have for online retailers from your study about how to avoid crossing that line?
Wang: This practice, sending conditional review solicitations, asking customers for five-star reviews, this is quite prevalent. So we started this project wanting to find out whether it is indeed a beneficial tactic for a retailer to adopt because, like Nevena said, there are a lot of theories that would say it's not. And that's what we found. Contrary to conventional wisdom, it's not, no. Especially if you care about repeat businesses, if you care about customer trust and customer loyalty, all these long-term consequences, you should not do this.
But on the other hand, retailers, especially small retailers that are just starting out, might say, "I need an online review profile to be discovered." And that's true. And we also found out that without solicitations, you probably won't get a lot of reviews. In this case, a retailer really should solicit unconditional customer reviews. Don't ask the customers to leave you a five-star one. Just ask them to be sincere, and be sincere yourself like Nevena just said, by placation, which translates to customer service in terms of managerial tactics.
That mitigates the effect of soliciting reviews and also provides a way to satisfy your customers. And maybe even offer this kind of customer service before the review solicitation stage, where maybe you make it very clear at the point of sale that, "This is what I'm committed to do," so that afterwards, when you send out a review solicitation, it doesn't come off as, "Are you trying to manipulate me?"
And there's also the underdog narrative or underdog biography. Essentially, if you're a small business, you can try to appeal to your customer base by telling them how small you are, how you're an underdog compared to the big businesses in the market. And this is why you need the customers to write reviews. Previous research actually shows that customers' loyalty is stronger when they identify with a small business as opposed to a large business. It's almost analogous to the notion of supporting small and local businesses.
Croft: Lastly, I'm wondering [about] the key takeaways or the most important things for consumers to understand about the implications of your study.
Wang: Given all the manipulation that a retailer may do, I think it's important as a consumer to know what's being posted online might not entirely reflect the truth. The customers should really think about how the reviews are being generated. Just because a product has a lot of reviews or a lot of positive reviews does not necessarily mean that it is a good product.
There are many ways for a retailer to manipulate the system. For instance, a retailer can hire people to write fake reviews. They can incentivize previous customers or perhaps even influencers, provide them with a free product in exchange for a glowing, positive review. On eBay, you can actually literally buy 10,000 likes for 20 bucks. So there are many things that a retailer can do, and they do go through these extreme lengths because consumers do rely on these reviews so much.
I think it's worthwhile to think about what truly matters when you choose a product, and try to glean [that] information from the product websites and the review text, not just the ratings themselves, to see whether that product in fact matches up with my expectations.
Koukova: From a consumer standpoint, I think with our study we're illustrating how important product reviews are. Although this experiment didn't make it to the specific study, … when designing the specific communication message in other experiments, we asked consumers to write a review that will help other consumers. I think, overall, a number of consumers feel more empowered that by writing reviews, they're helping other consumers like them, and they feel that they have to offer very sincere and a review which is really reflective of their actual experience.
Again, I am just emphasizing the importance for the whole system to work that we as consumers also do our share and we also review products, provide our sincere opinion, our actual opinion, and support companies that are doing their best to help customers to provide good quality products and services to customers.